We can assist in implementing plans to help maximize results, flexibility, and tax benefits and create a guaranteed lifetime income for you.
The key is to have the skill and technique to combine different products together to create efficiency. We all have a finite amount of money to work with so we have to be as efficient as possible to create the highest and most reliable income stream in retirement by utilizing our Two Economic Powers® approach.
“Our approach to saving is all wrong. We need to think about monthly income, not net worth.”
American EconomistHarvard Business Review ContributorEconomic Sciences Nobel Prize Laureate
We do not know how long we are going to live. If we knew this, then retirement planning would be easy. By simply dividing the number of years into the total amount of retirement assets, you would find your retirement income. So, do you plan for the best or the worst-case scenario? Whichever you plan for, does that increase or decrease your distribution rate?
Determine a distribution rate before knowing the rate of return of our Retirement Assets in any given year.
Most traditional retirement plans show a constant rate of return vs. variable return. How do Retirement Assets react to fluctuating rate of returns? We have no idea what our sequence of returns will be the day we retire. What if your portfolio loses 10-15% in a given year, what is your plan of action for the following year?
The key is diversifying where you put your retirement savings. Using these TWO POWERS together can create higher retirement income streams. In doing this, you will create a situation with multiple savings sources. This allows you to withdraw yearly income from different areas in your retirement years from a more stable savings base.
Most people used to get both powers by default through defined benefit pension plans. As defined contribution plans such as the 401(k) and 403(b) became more popular, very few people continued to have the security of a pension plan. It is no longer your employer’s responsibility to fund your retirement. Very little education has been given to individuals regarding what they must do to provide for themselves the day they retire.
How Much Do I Need to Save?
Where Do I Need To Put It?
Think of it like climbing a mountain. What’s the objective? Is getting to the top the objective? Or is it really getting to the top then making it back down safely the ultimate objective? This is a metaphor for our financial lives. Getting up the mountain is our Pre-Retirement/Accumulation phase and getting back down is our Retirement/Distribution phase. The key is this one continuous journey. Understanding how retirement income streams work (distribution) defines “how you pack your bags” in Pre-Retirement.
If you were going to climb a mountain, would you get a guide? What if the guide said they could get you to the top of the mountain, but they weren’t sure how you were going to get back down? Would you continue to use that guide or find another one? Let us be your guide to all things retirement.
Someone might be able to create $75,000 a year of retirement income based on current savings with an inefficient process.
The same individual could create $125,000 a year of retirement income with an efficient process using the same amount of savings.
Let’s say you saved $1,000,000 at the time of your retirement. Traditionally you take out the safe annual withdraw rate, 3-4%, a year which is $30,000 – $40,000. With the inflation adjustment, people who make $100,000 yearly to support their lifestyle today need to be making $180,000 annually in 20 years with 3% inflation.
The 3-4% Rule
at the time of you retirement.
$30K - $40K
(the safe annual withdrawal rate)
With Inflation Adjustment
to support your lifestyle today
in assets to retire and maintain your current lifestyle.
How feasible does this path sound running your own numbers? Is this the path you would want to stay on if you had the choice?
Let’s say that your current income is $150,000 a year. At age 65, with 3% inflation, your adjusted income needs to be $314,067 a year to maintain your current lifestyle.
If you currently have
saved for retirement.
and you continue to save
each year at a 6% annual interest rate
when you're 65, you will have
withdrawing 3.5% annually you will only have
a year in annual income to live on at age 65.
Let's say that your current income is $200,000 a year. At age 65, with 3% inflation, your adjusted income needs to be $311,593 a year to maintain your current lifestyle.
*Hypothetical illustration may not be used to predict or project investment results.
Approach your yearly retirement income with the Two Economic Powers® Strategy
The example below uses the same amount of savings to generate annual Retirement Income
Comparisons. Actual results may be more or less favorable.
ONE ECONOMIC POWER® STRATEGY
TWO ECONOMIC POWERS® STRATEGY
The system by which an individual can protect their assets in the event of market unpredictability immediately following retirement.
Just answer a few simple questions to see how well prepared you are for retirement and we’ll get in touch to find the very best plan that fits your lifestyle and financial concerns.
You’ll also receive a complimentary white paper featuring eight core ideas to retirement income planning, written by retirement income expert Dr. Wade Pfau.
3445 American River Dr.
Sacramento, CA 95864
As Founder, President, and Financial Advisor at Wealth Design Group, I specialize in holistic personal financial planning, business succession and wealth strategies, and advanced life insurance strategies. I am the primary advisor when working with clients at the firm, and I also manage the business in a more general sense. As a perpetual student of the industry and a truth-seeker, I am motivated by looking past the hype of the market for solutions that truly help my clients. My purpose is to help my clients have a more prosperous and comfortable financial life.